Patel Motel: A Case Study of Hard Work, Communication and Investing Profits to Create Wealth
Did you know that 50% of motels in the United States are owned and operated by Indians? This is the story of the Patel Motel cartel.
In the 1950s, families from India began immigrating to the United States. Because it was so expensive, they often relied on family money to help with travel costs and getting settled. Once in the US, they got jobs, earned more, and helped another family member make the same move.
This is a simple story of one family helping another family. The family was raising money for a down payment on a small motel. Then, she moved and managed it on a permanent basis. They spent their weekdays and weekends working the front desk, cleaning rooms, and making beds.
They worked hard, hosting thousands of guests and carefully saving money. Whenever the supply became large enough, it was not used to improve their lifestyle, but instead to the next opportunity, which was almost always another motel.
Over time, when it grew into a meaningful business, they had free capital that they could pay another relative who would do the same.
In 1999, when the NYT wrote the article "The Patel Motel Cartel?" Indian immigrants owned half of all motels in the United States.
When asked why they like to buy motels, Vilpesh Patel gave 3 reasons:
1) Technically easy to operate
2) You don’t need fluent English, just the desire to work long hours is enough,
3) Constant cash flow.
Over the decades, not only did they receive income from each order, but the land also appreciated, becoming incredibly valuable, making these families rich. Imagine owning motel properties throughout southern California in small towns that are booming right now.
The 3 interesting ideas in this story are that they:
1) Rally together to make one family succeed, thereby making waves for everyone.
2) Never returned the money, but instead passed it on to the next family member to create opportunities for them.
3) Always put money into the next income generating asset (another motel) instead of inflating my lifestyle.
If building wealth is possible for an immigrant who comes to the United States with nothing, then it is possible for you. Build your community, put in the hard work and make it happen!
Author Elina Linderman
